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Acquisition and Eliminating Entries Potluck Corp. acquired all of the stock of Sauers Corp. on June 30, 2022, in an acquisition reported as a stock acquisition. Sauers' trial balance at the date of acquisition, along with the fair values of its assets and liabilities, are: Tangible assets Intangible assets Liabilities Total 3 Capital stock Retained earnings Accumulated other comprehensive income Show Transcribed Text c Fair Value Dr (Cr) $66,000,000 $27,500,000 16,500,000 99,000,000 (61,600,000) (60,500,000) (11,000,000) (9,790,000) (110,000) Book Value Dr (Cr) $0 Potluck pays $99 million in cash and issues 1,650,000 shares of stock to the former owners of Sauers. Potluck's stock has a par value of $0.01 /share. The market price of the shares at the date of acquisition, $39 /share, is used to value the shares issued. Registration fees for the stock are $550,000 and legal and consulting fees connected with the acquisition are $660,000, both paid in cash. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions.

Acquisition and Eliminating Entries Potluck Corp. acquired all of the stock of Sauers Corp. on June 30, 2022, in an acquisition reported as a stock acquisition. Sauers' trial balance at the date of acquisition, along with the fair values of its assets and liabilities, are: Tangible assets Intangible assets Liabilities Total 3 Capital stock Retained earnings Accumulated other comprehensive income Show Transcribed Text c Fair Value Dr (Cr) $66,000,000 $27,500,000 16,500,000 99,000,000 (61,600,000) (60,500,000) (11,000,000) (9,790,000) (110,000) Book Value Dr (Cr) $0 Potluck pays $99 million in cash and issues 1,650,000 shares of stock to the former owners of Sauers. Potluck's stock has a par value of $0.01 /share. The market price of the shares at the date of acquisition, $39 /share, is used to value the shares issued. Registration fees for the stock are $550,000 and legal and consulting fees connected with the acquisition are $660,000, both paid in cash. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Acquisition and Eliminating Entries Potluck Corp. acquired all of the stock of Sauers Corp. on June 30, 2022, in an acquisition reported as a stock acquisition. Sauers' trial balance at the date of acquisition, along with the fair values of its assets and liabilities, are: Tangible assets Intangible assets Liabilities Total Capital stock Retained earnings Accumulated other comprehensive income Show Transcribed Text Cash Common stock Additional Paid-in Capital Goodwill 3 Intangible assets To record the acquisition Potluck pays $99 million in cash and issues 1,650,000 shares of stock to the former owners of Sauers. Potluck's stock has a par value of $0.01 /share. The market price of the shares at the date of acquisition, $39 /share, is used to value the shares issued. Registration fees for the stock are $550,000 and legal and consulting fees connected with the acquisition are $660,000, both paid in cash. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions. Ċ a. Prepare the journal entry Potluck made to record the stock acquisition on its own books on June 30, 2022. Debit Credit 99,000,000 16,500 64,499,500 63,200,000 99,000,000 V (E) Tangible assets Goodwill Intangible assets Book Value Dr (Cr) To revalue Sauer's assets and liabilities to fair value Fair Value Dr (Cr) $66,000,000 $27,500,000 16,500,000 99,000,000 (61,600,000) (60,500,000) (11,000,000) (9,790,000) (110,000) 0x 0x 0x 0x 0x b. Prepare working paper eliminating entries (E) and (R) to combine the accounts of Potluck and Sauers at June 30, 2022. To eliminate Sauer's equity accounts against the investment account (R) Goodwill Additional Paid-in Capital くくくく Debit O O O O 0 0 0 0 0 O O O O O 0 $0 0 0 0 Credit 0x 0x 0x 0x 0x 0x 0x 0x 0x
Transcribed Image Text:Acquisition and Eliminating Entries Potluck Corp. acquired all of the stock of Sauers Corp. on June 30, 2022, in an acquisition reported as a stock acquisition. Sauers' trial balance at the date of acquisition, along with the fair values of its assets and liabilities, are: Tangible assets Intangible assets Liabilities Total Capital stock Retained earnings Accumulated other comprehensive income Show Transcribed Text Cash Common stock Additional Paid-in Capital Goodwill 3 Intangible assets To record the acquisition Potluck pays $99 million in cash and issues 1,650,000 shares of stock to the former owners of Sauers. Potluck's stock has a par value of $0.01 /share. The market price of the shares at the date of acquisition, $39 /share, is used to value the shares issued. Registration fees for the stock are $550,000 and legal and consulting fees connected with the acquisition are $660,000, both paid in cash. Required Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions. Ċ a. Prepare the journal entry Potluck made to record the stock acquisition on its own books on June 30, 2022. Debit Credit 99,000,000 16,500 64,499,500 63,200,000 99,000,000 V (E) Tangible assets Goodwill Intangible assets Book Value Dr (Cr) To revalue Sauer's assets and liabilities to fair value Fair Value Dr (Cr) $66,000,000 $27,500,000 16,500,000 99,000,000 (61,600,000) (60,500,000) (11,000,000) (9,790,000) (110,000) 0x 0x 0x 0x 0x b. Prepare working paper eliminating entries (E) and (R) to combine the accounts of Potluck and Sauers at June 30, 2022. To eliminate Sauer's equity accounts against the investment account (R) Goodwill Additional Paid-in Capital くくくく Debit O O O O 0 0 0 0 0 O O O O O 0 $0 0 0 0 Credit 0x 0x 0x 0x 0x 0x 0x 0x 0x
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